Gabungan OM_P1 sd P14

1. Prof. Dr. H. Aminullah Assagaf, SE., MS., MM., M.Ak
assagaf29@yahoo.com
Hp : 08113543409
Surabaya, 28 Oktober 2018
Content

2. MINGGU KEMMPUAN AKHIR BAHAN KAJIAN BENTUK KRITERIA PENILAIAN BOBOT
KE YANG DIHARAPKAN (Materi Ajar) PEMBELAJARAN (Indikator) NILAI
1 Mampu menjelaskan 1. Introduction to Operations and Supply Chain Ceramah, Kelengkapan dan kebenaran 8%
dan mempresentasikan Management bahas artikel penjelasan, tingkat
pengertian manajemen (Ch. 1: RR), (Ch.1: VP), (Ch. 1: JZ), (Ch.1:RD) dan aplikasi MPO komunikatif
produksi & operasi (MPO)
2 Mampu mengidentifikasi 2.1 Operations strategy Ceramah, Kebenaran metode, kerjasama, 8%
dan mengevaluasi 2.2 Quality management bahas artikel kordinasi dalam menyusun
Strategi MPO dan (Ch. 2 dan 3: RR), (Ch. 3,6: VP), (Ch.6:JZ), dan aplikasi MPO perencanaan
manajemen kualitas (Ch. 2, 5, 6: RD)
3 Mampu memahami 3.1 Product Design Ceramah, diskusi Ketajaman analisis dan 7%
Product design dan 3.2 Service Design tugas makalah, Kebenaran metode
Service design (Ch. 4 dan 5: RR), (Ch. 12:VP), (Ch. 5:JZ), (Ch. 3: RD) bahas artikel
4 Mampu menjelaskan 4. Processes and Technology Ceramah, diskusi Ketajaman analisis dan 7%
Prosess dan (Ch. 6: RR), (Ch. 4,7: VP), (Ch. 2:JZ), (Ch. 3: RD) tugas makalah, kebenaran teknik analisis
teknologi yang digunakan bahas artikel
dalam MPO
5 Mampu melakukan 5. Capacity and Facilities Ceramah, diskusi Kebenaran metode dan 7%
analisis dalam (Ch. 7: RR), (Ch.5: VP) tugas makalah, kebenaran proses analisis
mengatur kapasitas bahas artikel
dan fasilitas
6 Mampu menjelaskan 6. Human Resources Ceramah, diskusi Kebenaran metode dan 7%
proses rancang bangun (Ch. 8: RR), (Ch. 2: VP), (Ch. 3:JZ) tugas makalah, kebenaran proses analisis
produk barang dan jasa bahas artikel
7 Mampu menjelaskan 7. Project Management Ceramah, diskusi Ketajaman analisis dan 7%
proses atau kegiatan (Ch. 9: RR), (Ch. 8:VP) tugas makalah, kebenaran analisis seleksi
dalam manajemen proyek bahas artikel
Mata Kuliah : Manajemen Produksi dan Operasi……...……...….Semester : Genap 2018………………......Kode :………………...….…SKS : 3
Jurusan : Magister Manajemen (S2)………………….…….………………….……………......Dosen : Prof. Dr. H. Aminullah Assagaf, SE., MS., MM., M.Ak
Kompetensi : Menguasi Teori dan Konsep Manajemen Produksi dan Operasi serta Memiliki Pengalaman Praktis Manajemen Produksi dan Operasi
UTS

3. MINGGU KEMMPUAN AKHIR BAHAN KAJIAN BENTUK KRITERIA PENILAIAN BOBOT
KE YANG DIHARAPKAN (Materi Ajar) PEMBELAJARAN (Indikator) NILAI
8 Mampu menjelaskan 8.1 Supply Chain Strategy and Design Ceramah, diskusi Ketajaman analisis dan 7%
strategi supply chain dan 8.2 Global Supply Chain Procurement and tugas makalah, kebenaran analisis
design, serta procurement Distribution bahas artikel pengembangan dan
dan distribusi (Ch. 10 dan 11: RR), (Ch. 11: VP), (Ch. 11:JZ), (Ch. 4: RD) evaluasi
9 Mampu menjelaskan 9. Forecasting Ceramah, diskusi Ketajaman analisis dan 7%
proses peramalan (Ch. 12: RR), (Ch. 15:VP), (Ch. 4: JZ), (Ch. 8: RD) tugas makalah, kebenaran analisis
yang diperlukan dalam bahas artikel pengembangan dan
MPO evaluasi
10 Mampu menjelaskan 10. Inventory Management Ceramah, diskusi Ketajaman analisis kinerja 7%
perencanaan dan (Ch. 13: RR), (Ch.3: VP), (Ch. 12,14: JZ) tugas makalah, dan kebenaran proses penilaian
pengendalian inventroy bahas artikel
11 Mampu menjelaskan 11. Sales and Operations Planning Ceramah, diskusi Kebenaran metode dan 7%
pengendalian bahan baku (Ch. 14: RR), (Ch. 8: VP), (Ch. 3, 13: JZ) tugas makalah, ketajaman analisis kinerja
dan pengawasan produksi bahas artikel
12 Mampu menjelaskan 12. Resource Planning Ceramah, diskusi Ketajaman analisis dan 7%
proses perencanaan (Ch. 15: RR), (Ch. 8: VP), (Ch. 13: JZ) tugas makalah, kebenaran metode
sumber daya bahas artikel penilaian karir
13 Mampu menjelaskan 13. Lean Systems Ceramah, diskusi Ketajaman analisis dan 7%
proses lean system (Ch. 16: RR), (Ch. 14: VP), (Ch. 7: RD) tugas makalah, kebenaran metode kompensasi
dalam MPO bahas artikel
14 Mampu menjelaskan 14. Scheduling Ceramah, diskusi Ketajaman analisis dan 7%
proses penyiapan (Ch. 17: RR), (Ch. 9: VP) tugas makalah, kebenaran penilaian kebijakan
schedule dalam MPO bahas artikel kompensasi
Reference:
(1) Roberta S. Russell, Bernard W. Taylor. 2011. Operations Management (RR)
(2) Ved Prakash Panda. 2011. Production And Operation Management (VP)
(3) Junaidi Zamir. 2010. Production Operating Management (JZ)
(4) R. Dan Reid, Nada R. Sanders. 2012. Operations Management:
An Integrated Approach, 5th Edition International Student Version (RD)
UAS

4. Organization of This Text:
Part I – Operations Management
• Introduction Operations and
Supply Chain Management:
Operations Strategy:
Chapter
Chapter
Chapter
1
2
3
•
• Quality Management:
•
•
•
•
•
•
Product Design:
Service Design:
Processes and Technology:
Capacity and Facilities:
Human Resources:
Project Management:
Chapter
Chapter
Chapter
Chapter
Chapter
Chapter
4
5
6
7
8
9
1-2
Organization of This T
Part I – Operations Ma

5. Organization of
Part II – Supply
This Text:
Chain Management
• Supply Chain
Strategy and Design:
Global Supply Chain
Procurement and Distribution:
Chapter 10
•
Chapter 11
•
•
•
Forecasting:
Inventory Management:
Sales and
Operations Planning:
Resource Planning:
Lean Systems:
Scheduling:
Chapter
Chapter
12
13
Chapter
Chapter
Chapter
Chapter
14
15
16
17
•
•
•
Organization of This T
Part II – Supply Chain

6. Content
• P1-Ch.1: Introduction Operations and Supply Chain Management
• P2-Ch.2, 3: Operations Strategy : Quality Management
• P3-Ch.4, 5: Product Design: Service Design
• P4-Ch.6 : Processes and Technology
• P5-Ch.7 : Capacity and Facilities
• P6-Ch.8 : Human Resources
• P7-Ch.9 : Project Management
• P8-Ch.10,11 : Supply Chain Strategy and Design : Global Supply Chain Procurement and
Distribution
• P9-Ch.12 : Forecasting
• P10-Ch.13 : Inventory Management
• P11-Ch.14 : Sales and Operations Planning
• P12-Ch.15 : Resource Planning
• P13-Ch.16 : Lean Systems
• P14-Ch.17 : Scheduling
• Wss:

7. P1_Ch1: Introduction to Operations and Supply Chain
Management
Content

8. Introduction to Operations and
Supply Chain Management
Cha pte r 1

9. Lecture outline







What operations and supply chain managers
Operations function
Evolution of operations management
Globalization and competitiveness
Operations
Strategy and organization of the text
do
Learning objectives for this course
1-2

10. What Operations and Supply Chain
Managers Do
 What is operations management?
Design, operation, and improvement of productive systems

 What is operations?
A function or system that transforms inputs into outputs of
greater value
What is a transformation process?


A series of activities along a value chain extending from
supplier to customer

Activities that
eliminated
do not add value are superfluous and should be

1-3

11. Transformation Process


Physical: as in manufacturing operations
Locational: as in transportation or warehouse
operations
Exchange: as in retail operations
Physiological: as in health care
Psychological: as in entertainment



 Informational: as in communication
1-4

12. Operations
process
as a transformation
•Goods
1-5
Feedback & Requirements
OUTPUT
•Services
INPUT
•Material
•Machines
•Labor
•Managem
•Capital
ent
TRANSFORMATION
PROCESS

13. Operations as technical core





Operations
Marketing
Finance and accounting
Human resources
Outside suppliers
1-6

14. 1-7

15. Operations
function
as a basic business
Operations
Finance and Sales and
accounting marketing
1-8

16. Historical Events in Operations Management
Era Events/Concept
s
Steam engine
Division of labor
Dates Originator
1769
1776
1790
James Watt
Adam Smith
Eli Whitney
Industrial
Revolution
Interchangeable parts
Principles of scientific
management
Time and motion
studies
Activity scheduling
chart
Moving assembly line
1911 Frederick W. Taylor
Frank and Lillian
Gilbreth
1911
Scientific
Manageme
nt 1912
1913
Henry Gantt
Henry Ford
1-13

17. Historical Events in Operations Management (cont.)
Era Events/Concepts Dates Originator
Hawthorne studies 1930 Elton Mayo
1940s Abraham Maslow
Human
Relations 1950s Frederick Herzberg
Motivation theories
1960s Douglas McGregor
Linear programming 1947 George Dantzig
Digital computer 1951 Remington Rand
Simulation, waiting
line theory, decision
theory, PERT/CPM
Operations
Research 1950s Operations research groups
Joseph Orlicky, IBM
and others
1960s,
1970s
MRP, EDI, EFT, CIM
1-14

18. Historical Events in Operations Management (cont.)
Dates Originator
Era Events/Concepts
JIT (just-in-time) 1970s Taiichi Ohno (Toyota)
TQM (total quality
management)
W. Edwards Deming,
Joseph Juran
1980s
Quality
Revolution
Strategy and
operations
Wickham Skinner,
Robert Hayes
1980s
Michael Hammer,
James Champy
Business process reengineering 1990s
Six Sigma 1990s GE, Motorola
1-15

19. Historical Events in Operations Management (cont.)
Era
Internet
Revoluti
on
Events/Concepts Dates
1990s
Originator
ARPANET, Tim
Berners-Lee SAP,
i2 Technologies,
ORACLE
Internet, WWW,
management
ERP, supply chain
E-commerce 2000s Amazon, Yahoo,
eBay, Google, and
others
Globaliz
ation
WTO, European Union, and other
trade agreements, global supply
chains, outsourcing, BPO, Services
Science
1990s
2000s
Numerous countries
and companies
1-16

20. Supply Chain Management
 Supply chain management - management of the flow
of information, products, and services across a
network of
partners
customers, enterprises, and supply chain
1-17

21. Globalization and Competitiveness
 Why “go global”?
favorable cost
access to international markets
response to changes in demand
reliable sources of supply
latest trends and technologies





 Increased globalization
results from the Internet and falling trade barriers

1-18

22. Productivity and Competitiveness
Competitiveness

degree to which a nation can produce goods and
services that meet the test of international markets
Productivity


ratio of output to input

 Output
sales made, products produced, customers served,
meals delivered, or calls answered
Input


labor hours, investment in equipment, material usage,
or square footage

1-19

23. Productivity
(cont.)
and Competitiveness
Measures of Productivity
1-20

24. Productivity and Competitiveness
(cont.)
Retrenching

productivity is increasing, but both output and input
decrease with input decreasing at a faster rate
Assumption that more input would cause output
increase at the same rate

 to
certain limits to the amount of output may not be
considered

output produced is emphasized,
increased inventories
not output sold;

1-21

25. Strategy and Operations
Strategy - provides direction for achieving a mission
Five steps for strategy formulation


Defining a primary task

What is the firm in the business of doing?

Assessing core competencies

What does the firm do better than anyone else?

Determining order winners and order qualifiers

What qualifies an item to be considered for purchase?
What wins the order?


Positioning the firm

How will the firm compete?

Deploying the strategy

1-22

26. Mission
and Vision
Corporate
Strategy
Operations
Strategy
Marketing
Strategy
Financial
Strategy
Strategic Planning
1-23
Financial
Strategy
Operations
Strategy
Marketing
Strategy
Corporate
Strategy
Mission
and Vision

27. Order Winners
Qualifiers
and Order
Source: Adapted from Nigel Slack, Stuart Chambers, Robert Johnston, and Alan
Betts, Operations and Process Management, Prentice Hall, 2006, p. 47
1-24

28. Positioning the Firm
Cost
Speed
Quality
Flexibility




1-25

29. Positioning the Firm: Cost
 Waste elimination
relentlessly pursuing the removal of all waste

 Examination of cost structure
looking at the entire cost structure for reduction
potential
Lean production


providing low costs
operations
through disciplined

1-26

30. Positioning the Firm: Speed



Fast moves, fast adaptations, tight linkages
Internet - conditioned customers to expect immediate responses
Service organizations - always competed on speed
(McDonald’s, LensCrafters, and Federal Express)
Manufacturers - time-based competition: build-to-order
production and efficient supply chains

 Fashion industry - two-week design-to-rack lead time of
Filipino retailer ex. Bench
1-27

31. Positioning the Firm: Quality
 Minimizing defect rates or conforming to design
specifications; please the customer
Ritz-Carlton - one customer at a time

Service system is designed to “move heaven and earth”
customer
Every employee is empowered to satisfy a guest’s wish
to satisfy


Teams at all levels set objectives and devise quality action plans

Each hotel has a quality leader

1-28

32. Positioning the Firm:
Flexibility
 Ability to adjust to changes in product mix,
production volume, or design
National Bicycle Industrial Company

offers 11,231,862 variations
delivers within two weeks at costs only 10% above
standard models


mass
parts
customization: the mass production of customized

1-29

33. Balanced Scorecard
Balanced scorecard

measuring more than financial performance

finances
customers
processes
learning and growing




 Key performance indicators
a set of measures that help managers
performance in critical areas
evaluate

1-32

34. O
Op
pe
e a
a o
on
ns
s M
Ma
an
na
ag
ge
em
me
en
n
Decision Analysis
Roberta Russell & Bernard W. Taylor, III
Operations Management
Chapter 1 Supplement

35. • Decision Analysis
• Decision Making without Probabilities
• Decision Analysis with Excel
• Decision Analysis with OM Tools
• Decision Making with Probabilities
• Expected Value of Perfect Information
• Sequential Decision Tree
Supplement 1-44
Lecture Outline

36. • Quantitative methods
• a set of tools for operations manager
• Decision analysis
• a set of quantitative decision-making
techniques for decision situations in which
uncertainty exists
• Example of an uncertain situation
• demand for a product may vary between 0 and 200
units, depending on the state of market
Supplement 1-45
Decision Analysis

37. • States of nature
• Events that may occur in the future
• Examples of states of nature:
• high or low demand for a product
• good or bad economic conditions
Decision making under risk
• probabilities can be assigned to the
states of nature in the future
•
occurrence of
• Decision making under uncertainty
• probabilities can NOT be assigned to the
occurrence of states of nature in the future
Supplement 1-46
Decision Making
Without Probabilities

38. • A graphical method for analyzing
decision situations that require a
sequence of decisions over time
• Decision tree consists of
• Square nodes - indicating decision points
• Circles nodes - indicating states of nature
• Arcs - connecting nodes
Supplement 1-64
Sequential
Decision Trees

39. 0.60 Market growth
$700,000
0.30
$1,000,000
0.70
Supplement 1-66
$2,540,000
Decision Tree Analysis
$1,290,000 $2,000,000
2
0.40
$225,000
$3,000,000
0.80
$1,740,000 6
0.20
1 $1,160,000 4
$450,000
0.60
$1,390,000 $2,300,000
3
0.40
$1,360,000
$790,000 7
5
$210,000

41. P2_ Ch.2 & Ch.3
• Ch.2_Operations Strategy
• Ch. 3_Quality Management
Content

42. Operations Strategy
Chapter 2

43. Four Steps for Strategy
Formulation
Defining a primary task



What is the firm in the business of doing?

Assessing core competencies
What does the firm do better than anyone else?

Determining order winners and order qualifiers
What wins the
What qualifies
order?
an item to be
firm

 considered for purchase?
Positioning the

How will the firm compete?

Copyright 2006 John Wiley & Sons, Inc. 2-3
Four Steps for Strate

44. Competitive Priorities
Cost
Quality
Flexibility
Speed




Copyright 2006 John Wiley & Sons, Inc. 2-4
Competitive Prioriti

45. Competitive Priorities:
Cost
Lincoln Electric

reduced costs by $10 million a year for 10 years
skilled machine operators save the company millions
would have been spent on automated equipment

that

Southwest Airlines

one type of airplane facilitates crew changes, record-
keeping, maintenance, and inventory costs
direct flights mean no baggage transfers
$30 million annual savings in travel agent commissions
requiring customers to contact the airline directly


by

Copyright 2006 John Wiley & Sons, Inc. 2-5
Competitive Prioriti

46. Competitive Priorities:
Quality
Ritz-Carlton - one customer at a time

Every employee is empowered to satisfy a guest’s wish
Teams at all levels set objectives and devise quality
action plans
Each hotel has a quality leader
Quality reports tracks




guest room preventive maintenance cycles
percentage of check-ins with no waiting
time spent to achieve industry-best clean room
appearance



Guest Preference Reports are recorded in a database

Copyright 2006 John Wiley & Sons, Inc. 2-6
Competitive Prioriti

47. Competitive Priorities:
Flexibility
Andersen Windows

number of products offered grew from 28,000 to 86,000
number of errors are down to 1 per 200 truckloads


Custom Foot Shoe Store:

customer’s feet are scanned electronically to capture
measurements
custom shoes are mailed to the customer’s home in weeks
prices are comparable to off-the-shelf shoes



National Bicycle Industrial Company

offers 11,231,862 variations
delivers within two weeks at costs only 10% above standard
models


Copyright 2006 John Wiley & Sons, Inc. 2-7
Competitive Prioriti

48. Competitive Priorities:
Speed
Citicorp

advertises a 15-minute mortgage approval

L.L. Bean


ships orders the day they are received

Wal-Mart
replenishes its stock twice a week

Hewlett-Packard

produces electronic testing equipment in five days

General Electric

reduces time to manufacture circuit-breaker boxes into three

days and dishwashers into 18 hours
Dell


ships custom-built computers in two days

Motorola
needs less than 30 minutes to build to order pagers

Copyright 2006 John Wiley & Sons, Inc. 2-8
Competitive Prioriti

49. Corporate Strategy
Operations provides support for a
differentiated strategy

 Operations serves as a firm’s distinctive
competence in executing
better than competitors
similar strategies
Copyright 2006 John Wiley & Sons, Inc. 2-9
Operations’ Role in

50. Strategic Decisions in
Operations
Services Process
and
Technolog
y
Products
Human
Resource
s
Quality
Capacity
Sourcing Operatin
g
Systems
Facilities
Copyright 2006 John Wiley & Sons, Inc. 2-14
Strategic Decisions

51. Products and Services
Make-to-order

products and services are made to customer
specifications after an order has been received
Make-to-stock


products and services are made in anticipation of
demand
Assemble-to-order


products and services add options according to
customer specifications

Copyright 2006 John Wiley & Sons, Inc. 2-15
Operations Strategy:
Products and Servic

52. Processes and technology
Project

one-at-a-time production of a product to customer order

Batch production

systems process many different jobs at the same time
in groups (or batches)
Mass production


large volumes of a standard product for a mass market

Continuous production

used for very high volume commodity products

Copyright 2006 John Wiley & Sons, Inc. 2-16
Production Strategy:
Processes and techno

53. Product-Process Matrix
Source: Adapted from Robert
Hayes and Steven Wheelwright,
Restoring the Competitive
Edge: Competing Through
Manufacturing (New York: John
Wiley & Sons, 1984), p. 209
Copyright 2006 John Wiley & Sons, Inc. 2-17
Product-Process Ma

54. Copyright 2006 John Wiley & Sons, Inc. 2-18
project that took almost 10 years to complete.
s Production
A paper manufacturer produces a
continuous sheet paper from wood
hich is mixed, pressed,
dried, and wound onto reels.
Mass Production
Here in a clean room a worker performs
quality checks on a computer assembly line.
Batch Production
At Martin Guitars bindings on the guitar frame are
installed by hand and are wrapped with a cloth
webbing until glue is dried.
Project
Construction of the aircraft carrier USS Nimitz was a huge
C ontinuou
A paper man
continuous
pulp slurry, w

55. Processes and Technology
Professional service

highly customized and very labor intensive

Service shop

customized and labor intensive

Mass service

less customized and less labor intensive

Service Factory

least customized and least labor intensive

Copyright 2006 John Wiley & Sons, Inc. 2-19
Service Strategy:
Processes and Techn

56. Service-Process Matrix
Source: Adapted from Roger
Schmenner, “How Can Service
Businesses Survive and
Prosper?” Sloan Management
Review 27(3):29
Copyright 2006 John Wiley & Sons, Inc. 2-20
Service-Process Matr

57. Copyright 2006 John Wiley & Sons, Inc. 2-21
on extensive training in medicine.
delivery is affected by students in each class.
Service Factory
Electricity is a commodity available
continuously to customers.
Mass Service
A retail store provides a standard array of
products from which customers may choose.
Service Shop
Although a lecture may be prepared in advance, its
Professional Service
A doctor provides personal service to each patient based

58. Capacity and Facility
 Capacity strategic decisions include:
When, how much, and in what form to alter

capacity
Facility strategic decisions include:

whether demand should be met with a few large

facilities or with several smaller ones
whether facilities should focus on serving certain
geographic regions, product lines, or customers
facility location can also be a strategic decision


Copyright 2006 John Wiley & Sons, Inc. 2-22
Operations Strategy:

59. Human Resources
What is skill levels and degree of autonomy
required to operate production system?
What are training requirements and selection
criteria?
What are policies on performance evaluations,
compensation, and incentives?





Will workers be salaried, paid
paid a piece rate?
Will profit sharing be allowed,
criteria?
an hourly
and if so,
rate, or
on what
Copyright 2006 John Wiley & Sons, Inc. 2-23
Operations Strategy:

60. Human Resources (cont.)
Will workers perform individual tasks or work
in teams?
Will they have supervisors or work in self-
managed work groups?
How many levels of management will be
required?
Will extensive worker training be necessary?
Should workforce be cross-trained?
What efforts will be made in terms of
retention?






Copyright 2006 John Wiley & Sons, Inc. 2-24
Operations Strategy:
Human Resources (c

61. Quality
What is target level of quality for our
products and services?
How will it be measured?
How will employees be involved with
quality?



 What will be the responsibilities
quality department?
of the
Copyright 2006 John Wiley & Sons, Inc. 2-25
Operations Strategy:

62. Quality (cont.)
What types of systems will be set up to
ensure quality?

How
How
How
will
will
will
quality awareness be maintained?
quality efforts be evaluated?


 customer perceptions of quality be
determined?
How will decisions
affect quality?
in other functional areas

Copyright 2006 John Wiley & Sons, Inc. 2-26
Operations Strategy:

63. Sourcing
Vertical integration

degree to which a firm produces parts that go

into its products
Strategic Decisions

How much of work should be done outside
firm?
the

On what basis should particular items
made in-house?
When should items be outsourced?
How should suppliers be selected?
be



Copyright 2006 John Wiley & Sons, Inc. 2-27
Operations Strategy:

64. Sourcing (cont.)
What type of relationship should be
maintained with suppliers?
What is expected from suppliers?
How many suppliers should be used?



How can quality and dependability
suppliers be ensured?
of

How can suppliers
collaborate?
be encouraged to

Copyright 2006 John Wiley & Sons, Inc. 2-28
Operations Strategy:

65. Operating Systems
How will operating systems execute
decisions?
How to align information technology
strategic
and



operations strategic goals?
How information technology supports both
customer and worker demands for rapid access,
storage, and retrieval of information?
How information technology support decisions
making process related to inventory levels,
scheduling priorities, and reward systems?

Copyright 2006 John Wiley & Sons, Inc. 2-29
Operations Strategy:

66. Copyright 2006 John Wiley & Sons, Inc. 2-30
Financial
Strategy
Operations
Strategy
Marketing
Strategy
Corporate
Strategy
Mission
and Vision
Strategic Planning

67. Performance
Indicators
Robert Kaplan and David
l
Press, 2004), Figure 3-2,
Copyright 2006 John Wiley & Sons, Inc. 2-32
Key
Perform
Source:
Robert Kaplan and Davi
Norton, Strategy Maps:
Converting Intangible
Assets into Tangible
Outcomes (Boston:
Harvard Business Schoo
Press, 2004), Figure 3-2
p. 67

68. Dashboard
Radar Chart
Copyright 2006 John Wiley & Sons, Inc. 2-33
Balanced Scorecard

69. Operations
Global markets, global sourcing, and
global operations
Virtual companies





Greater choice, more
Emphasis on service
Speed and flexibility
individualism
Copyright 2006 John Wiley & Sons, Inc. 2-34
Issues and Trends in

70. Operations (cont.)
Supply chains
Collaborative commerce
Technological advances
Knowledge and ability to





learn
Environmental and
responsibilities
social
Copyright 2006 John Wiley & Sons, Inc. 2-35
Issues and Trends in

71. Changing Corporation
20th-Century 21st-Century
Characteristic Corporation Corporation
 Interdependencies
Source: Reprinted from John Byrne, “Management by Web,” Business Week (August 28, 2000), p. 87
by special permission, copyright 2000 by The McGraw-Hill Companies, Inc.
Copyright 2006 John Wiley & Sons, Inc. 2-36
Organization
Focus
Style
Source of strength
Structure
Resources
 Pyramid
 Internal
 Structures
 Stability
 Self-sufficiency
 Physical assets
 Web
 External
 Flexible
 Change
 Information
Changing Corporatio

72. Changing Corporation
(cont.)
20th-Century 21st-Century
Characteristic Corporation Corporation
 Hours
Source: Reprinted from John Byrne, “Management by Web,” Business Week (August 28, 2000), p. 87
by special permission, copyright 2000 by The McGraw-Hill Companies, Inc.
Copyright 2006 John Wiley & Sons, Inc. 2-37
Operations
Products
Reach
Financials
Inventories
Strategy
 Vertical integration
 Mass production
 Domestic
 Quarterly
 Months
 Top-down
 Virtual integration
 Mass customization
 Global
 Real-time
 Bottom-up
Changing Corporatio

73. Changing Corporation
(cont.)
20th-Century 21st-Century
Characteristic Corporation Corporation
Leadership
Workers
Job expectations
Motivation
Improvements
Quality
Source: Reprinted from John Byrne, “Management by Web,” Business Week (August 28, 2000), p. 87
by special permission, copyright 2000 by The McGraw-Hill Companies, Inc.
Copyright 2006 John Wiley & Sons, Inc. 2-38
 Dogmatic
 Employees
 Security
 To compete
 Incremental
 Affordable best
 Inspirational
 Employees, free agents
 Personal growth
 To build
 Revolutionary
 No compromise
Changing Corporatio

74. Quality Management
Chapter 3

75. Meaning of Quality
Total Quality Management
Quality Improvement and
Employees


 Role of
Strategic Implications
Six Sigma
of TQM


Copyright 2006 John Wiley & Sons, Inc. 3-2
Lecture Outline

76. Lecture Outline (cont.)
TQM in Service Companies
Cost of Quality
Quality Management and Productivity
Identifying Quality Problems and Causes




 Quality Awards
Standards
ISO 9000
and Setting Quality

Copyright 2006 John Wiley & Sons, Inc. 3-3
Lecture Outline (con

77. Webster’s Dictionary


degree of excellence of a thing

American Society for Quality
totality of features and characteristics

that satisfy needs
Consumer’s and
Perspective
Producer’s

Copyright 2006 John Wiley & Sons, Inc. 3-4
Meaning of Quality

78. Dimensions of Quality:
Manufactured Products
Performance

basic operating characteristics of a product; how

well a car is handled or its gas mileage
Features

“extra” items added to basic features, such as a

stereo CD or a leather interior in a car
Reliability

probability that a product will operate properly
within an expected time frame; that is, a TV will
work without repair for about seven years

Copyright 2006 John Wiley & Sons, Inc. 3-6
Dimensions of Qual
Manufactured Produ

79. Dimensions of Quality:
Manufactured Products (cont.)
Conformance
degree to which a product meets pre–established
standards
Durability




how long product lasts before replacement

Serviceability
ease of getting repairs, speed of repairs,
and competence of repair person
courtesy

Copyright 2006 John Wiley & Sons, Inc. 3-7
Dimensions of Qual
Manufactured Produ

80. Dimensions of Quality:
Manufactured Products (cont.)
Aesthetics

how a product looks, feels, sounds,

smells, or tastes
Safety

assurance that customer will not suffer
injury or harm from a product; an
especially important consideration for

automobiles
Perceptions

subjective perceptions based on brand
name, advertising, and the like

Copyright 2006 John Wiley & Sons, Inc. 3-8
Dimensions of Qualit
Manufactured Produ

81. Dimensions of Quality:
Service
Time and Timeliness

How long must a customer wait for service,
and is it completed on time?
Is an overnight package delivered overnight?


Completeness:

Is everything customer asked for provided?
Is a mail order from a catalogue company
complete when delivered?


Copyright 2006 John Wiley & Sons, Inc. 3-9
Dimensions of Qual

82. Dimensions of Quality:
Service (cont.)
Courtesy:

How are customers treated by employees?
Are catalogue phone operators nice and are
their voices pleasant?


Consistency

Is the same level of service provided to each
customer each time?
Is your newspaper delivered on time every
morning?


Copyright 2006 John Wiley & Sons, Inc. 3-10
Dimensions of Qual

83. Dimensions of Quality:
Service (cont.)
Accessibility and convenience

How easy is it to obtain service?
Does a service representative answer you calls

quickly?

Accuracy

Is the service performed right every time?
Is your bank or credit card statement correct every month?


Responsiveness

How well does the company react to unusual situations?
How well is a telephone operator able to respond to a
customer’s questions?


Copyright 2006 John Wiley & Sons, Inc. 3-11
Dimensions of Qualit

84. A Final Perspective
Consumer’s and producer’s

perspectives depend on each other
Consumer’s perspective: PRICE
Producer’s perspective: COST
Consumer’s view must dominate



Copyright 2006 John Wiley & Sons, Inc. 3-13
Meaning of Quality:

85. Total Quality Management
Commitment to quality throughout organization

Copyright 2006 John Wiley & Sons, Inc. 3-15
 Principles of TQM
 Customer-oriented
 Leadership
 Strategic planning
 Employee responsibility
 Continuous improvement
 Cooperation
 Statistical methods
 Training and education
Total Quality Manag

86. Copyright 2006 John Wiley & Sons, Inc. 3-18
1. Create constancy of purpose
2. Adopt philosophy of prevention
3. Cease mass inspection
4. Select a few suppliers based on
quality
5. Constantly improve system and
workers
Deming’s 14 Points

87. Deming’s 14 Points (cont.)
Copyright 2006 John Wiley & Sons, Inc. 3-19
1. Institute worker training
2. Instill leadership among
supervisors
3. Eliminate fear among
employees
4. Eliminate barriers between
departments
5. Eliminate slogans
Deming’s 14 Points (

88. Deming’s 14 Points (cont.)
Copyright 2006 John Wiley & Sons, Inc. 3-20
1. Remove numerical quotas
2. Enhance worker pride
3. Institute vigorous training and
education programs
4. Develop a commitment from
top management to implement
above 13 points
Deming’s 14 Points (

90. and Role of Employees
Participative
problem solving

employees involved in
quality management
every employee has
undergone extensive
training to provide quality
service to Disney’s guests


Copyright 2006 John Wiley & Sons, Inc. 3-23
Quality Improvement
and Role of Employ

91. Quality
Presentation Group processes
Monitoring Problem analysis
Copyright 2006 John Wiley & Sons, Inc. 3-24
Circle Organization
ers
Same area
Supervisor/moderator
Training
Implementation Data collection
Problem
Solution Identification
Problem results List alternatives
Consensus
Problem
Brainstorming
Analysis
Cause and effect
Data collection
and analysis
Quality Circle Organizat
8-10 memb

92. Strategic Implications
TQM
of
 Strong leadership
 Goals, vision, or mission
 Operational plans and policies
 Mechanism for feedback
Copyright 2006 John Wiley & Sons, Inc. 3-25
Strategic Implications

93. A process for developing and delivering
near perfect products and services
Measure of how much a process
deviates from perfection
3.4 defects per million opportunities
Champion




an executive responsible for project success

Copyright 2006 John Wiley & Sons, Inc. 3-26
Six Sigma

94. Copyright 2006 John Wiley & Sons, Inc. 3-28
Six Sigma: DMAIC
DEFINE MEASURE ANALYZE IMPROVE CONTROL
67,000 DPMO
cost = 25% of
sales 3.4 DPMO

95. Seven Quality Control Tools
Pareto Analysis
Flow Chart
Check Sheet
Histogram




Scatter Diagram
SPC Chart
Cause-and-Effect
Diagram



Copyright 2006 John Wiley & Sons, Inc. 3-42
Seven Quality Control

96. Copyright 2006 John Wiley & Sons, Inc. 3-43
NUMBER OF
CAUSE DEFECTS PERCENTAGE
Poor design 80 64 %
Wrong part dimensions 16 13
Defective parts 12 10
Incorrect machine calibration 7 6
Operator errors 4 3
Defective material 3 2
Surface abrasions 3 2
125 100 %
Pareto Analysis

97. 10
Copyright 2006 John Wiley & Sons, Inc. 3-44
Percent
from
each
cause
(64)
(13)
(6)
70
60 Pareto Chart
50
40
30
20
(10)
(3) (2) (2)
0
Causes of poor quality

98. Finish
Finish
Copyright 2006 John Wiley & Sons, Inc. 3-45
Flow Chart
Start/
Operation Operation Decision Operation
Operation Operation
Decision Start/

99. Copyright 2006 John Wiley & Sons, Inc. 3-46
COMPONENTS REPLACED BY LAB
TIME PERIOD: 22 Feb to 27 Feb 2002
REPAIR TECHNICIAN: Bob
TV SET MODEL 1013
Integrated Circuits ||||
Capacitors |||| |||| |||| |||| |||| ||
Resistors ||
Transformers ||||
Commands
CRT |
Check Sheet

100. 0
Copyright 2006 John Wiley & Sons, Inc. 3-47
20
15
10
5
1 2 6 13 10 16 19 17 12 16 2017 13 5 6 2 1
Histogram

101. Copyright 2006 John Wiley & Sons, Inc. 3-48
Scatter Diagram
Y
X

102. Control Chart
Copyright 2006 John Wiley & Sons, Inc. 3-49
Number
of
defects
C
24
21
18
15
12
9
6
3
UCL = 23.35
c = 12.67
LCL = 1.99
2 4 6 8 10 12 14 16
Sample number

103. Defective from vendor Poor process design
control
Not to specifications management
Copyright 2006 John Wiley & Sons, Inc. 3-50
Cause-and-Effect Diagram
Measurement Human Machines
Faulty
testing equipment Poor supervision Out of adjustment
Incorrect specifications Lack of concentration Tooling problems
Improper methods Inadequate training Old / worn
Quality
Inaccurate
Problem
temperature
Ineffective quality
Dust and Dirt Material- Deficiencies
handling problems in product
design
Environment Materials Process

104. Created in 1987 to stimulate growth of
quality management in the United States
Categories
Leadership
Information and analysis
Strategic planning
Human resource
Focus
Process management
Business results
Customer and market focus








Copyright 2006 John Wiley & Sons, Inc. 3-51
Baldrige Award

105. Implications of ISO
Companies
9000 for U.S.
Many overseas companies
will not do business with a
supplier unless it has ISO
9000 certification
ISO 9000 accreditation
ISO registrars



 A total commitment to
is required throughout
organization
quality
an
Copyright 2006 John Wiley & Sons, Inc. 3-55
Implications of ISO 9000

107. P3_Ch.4 dan Ch.5
• Ch.4_Product Design
• Ch.5_Service Design
Content

108. O
Op
pe
e a
a o
on
ns
s M
Ma
an
na
ag
ge
em
me
en
n
Product Design
Chapter 4

109. •Design Process
•Concurrent Design
•Technology in Design
•Design Reviews
•Design for Environment
•Design for Robustness
•Quality Function Deployment
4-187
Lecture Outline

110. • Effective design can provide a competitive
edge
• matches product or service characteristics with
customer requirements
• ensures that customer requirements are met in the
simplest and least costly manner
• reduces time required to design a new product or
service
• minimizes revisions necessary to make a design
workable
Copyright 2009 John Wiley & Sons, Inc. 4-188
Design Process

111. Design Process (cont.)
•Product design
• defines appearance of product
• sets standards for performance
• specifies which materials are to be used
• determines dimensions and tolerances
4-189
Design Process (cont

112. • A new approach to
design that involves
•
•
Involves suppliers
Incorporates production
process
Uses a price-minus
simultaneous design of
products and processes
by design teams •
system
Scheduling and
management can be
complex as tasks are
done in parallel
Uses technology to aid
design
•
• Improves quality of
design decisions
early
•
4-207
Concurrent Design

113. Technology in Design
• Computer Aided Design (CAD)
• assists in creation, modification, and
a design
analysis of
• computer-aided engineering (CAE)
• tests and analyzes designs on computer screen
• computer-aided manufacturing (CAD/CAM)
• ultimate design-to-manufacture connection
• product life cycle management (PLM)
• managing entire lifecycle of a product
• collaborative product design (CPD)
4-208
Technology in Desig

114. Collaborative Product Design
• A software system for collaborative design and
development among trading partners
With PML, manages product data, sets up project
workspaces, and follows life cycle of the product
•
• Accelerates product development, helps to resolve
product launch issues, and improves quality
Designers can
• conduct virtual review sessions
• test “what if” scenarios
• assign and track design issues
• communicate with multiple tiers of suppliers
• create, store, and manage project documents
of design
•
4-209
Collaborative Product
(CPD)

115. • Review designs to prevent failures and
ensure value
• Failure mode and effects analysis (FMEA)
• a systematic method of analyzing product
failures
• Fault tree analysis (FTA)
• a visual method for analyzing interrelationships
among failures
• Value analysis (VA)
• helps eliminate unnecessary features and
functions
4-210
Design Review

116. Design for Environment and
Extended Producer Responsibility
• Design for environment
• designing a product from material that can be recycled
• design from recycled material
• design for ease of repair
• minimize packaging
• minimize material and energy used during manufacture,
consumption and disposal
Extended producer responsibility
• holds companies responsible for their product even after
useful life
•
its
4-215
Design for Environmen
Extended Producer Res

117. Design for Environment
4-216
Design for Environm

118. • Ability to meet present needs without compromising
those of future generations
• Green
• Use
product design
fewer materials
• Use recycled materials or recovered components
• Don't assume natural materials are always better
• Don't forget energy consumption
• Extend useful life of product
• Involve entire supply chain
• Change paradigm of design
Source: Adapted from the Business
Social Responsibility Web site,
www.bsr.org, accessed April 1, 2007. 4-217
Sustainability

119. • Translates voice of customer into technical
design requirements
• Displays requirements in matrix diagrams
• first matrix called “house of quality”
• series of connected houses
4-218
Quality Function
Deployment (QFD)

120. 5
Trade-off matrix
characteristics
4-219
Importance
1
Customer
requirements
3
Design
4
Relationship
matrix
2
Competitive
assessment
6 Target values
House of Quality

121. Material used in soleplate
+
+
-
-
+
4-222
Thickness of soleplate
Number of holes
Size of holes
Flow of water from holes
Time required to reach 450º
Time to go from 450º to 100º
Energy needed to press
Weight of iron
Size of soleplate
Tradeoff
Matrix

122. Our Iron (X) 2 1.7 9x5 4 T 35 15 0.7 50 600 N Y
Estimated impact
Design changes * * * * * * *
4-223
Objective
measures
Energy
needed
to
press
Weight
of
iron
Size
of
soleplate
Thickness
of
soleplate
Material
used
in
soleplate
Number
of
holes
Size
of
holes
Flow
of
water
from
holes
Time
required
to
reach
450º
Time
to
go
from
450º
to
100º
Protective
cover
for
soleplate
Units of measure ft-lb lb in. cm ty ea mm oz/s sec sec Y/N Y/N
Iron A 3 1.4 8x4 2 SS 27 15 0.5 45 500 N Y
Iron B 4 1.2 8x4 1 MG 27 15 0.3 35 350 N Y
3 4 4 4 5 4 3 2 5 5 3 0
Estimated cost 3 3 3 3 4 3 3 3 4 4 5 2
Targets 1.2 8x5 3 SS 30 30 500
Targeted Changes in
Design

123. SS = Silverstone
MG = Mirorrglide
T = Titanium
4-224
Completed
House of Quality

124. A Series of Connected
characteristics
House
of
quality
Parts
deployment
Process
planning
Operating
requirements
4-225
ustomer
uirements
Product
characteristics
Part
characteristics
Process
characteristics
Operations
A-4
Process
characteristics
A-3
A-2
Part
Product
characteristics
A-1
C
req
A Series of Connect
QFD Houses

125. • Promotes better understanding of
customer demands
• Promotes better understanding of
design interactions
• Involves manufacturing in design
process
• Provides documentation of design
process
4-226
Benefits of QFD

126. s
• Robust product
• designed to withstand variations in environmental
operating conditions
Robust design
and
•
• yields a product or service designed to withstand
variations
Controllable factors
• design parameters such as material used, dimensions,
and form of processing
Uncontrollable factors
• user's control (length of use, maintenance, settings, etc.)
•
•
4-227
Design for Robustnes

127. s (cont.)
• Tolerance
• allowable ranges of variation in the dimension of
part
a
• Consistency
• consistent errors are easier to correct than random
errors
• parts within tolerances may yield assemblies that
are not within limits
• consumers prefer product characteristics near their
ideal values
4-228
Design for Robustnes

128. Taguchi’s Quality Loss
• Quantifies customer
preferences toward
quality
• Emphasizes that
customer preferences
are strongly oriented
toward consistently
Design for Six Sigma
(DFSS)
•
4-229
Quality
Loss
Lower Target Upper
tolerance tolerance
limit limit
Taguchi’s Quality Lo
Function

129. Service Design
Chapter 5

130. •Service Economy
•Characteristics of Services
•Service Design Process
•Tools for Service Design
•Waiting Line Analysis for
Service Improvement
5-232
Lecture Outline

131. Source: U.S. Bureau of Labor Statistics, IBM Almaden Research Center
5-233
Service Economy

132. Characteristics of Services
• Services
• acts, deeds, or performances
• Goods
• tangible objects
• Facilitating services
• accompany almost all
• Facilitating goods
• accompany almost all
purchases of goods
service purchases
5-235
Characteristics of Ser

133. • Services are
intangible
Service output is
variable
• Service inseparable
from delivery
Services tend to be
• •
decentralized and
dispersed
Services are
consumed more
than products
Services can be
emulated
• Services have higher
customer contact
Services are
perishable
•
often
•
• easily
5-237
Characteristics
of Services (cont.)

134. Process
5-238
Service
Design

135. • Service concept
• purpose of a service; it defines target
market and customer experience
• Service package
• mixture of physical items, sensual
benefits, and psychological benefits
• Service specifications
• performance specifications
• design specifications
• delivery specifications
5-239
Service Design
Process (cont.)

136. Tools for Service Design
• Service blueprinting • Servicescapes
• line
• line
of
of
influence
interaction
space and function
ambient conditions
•
•
• line
• line
of
of
visibility
support
signs, symbols,
artifacts
Quantitative
techniques
and
•
•
• Front-office/Back-
office activities
5-245
Tools for Service De

137. • Operating characteristics
• average values for characteristics that describe
performance of waiting line system
• Queue
• a single waiting line
• Waiting line system
• consists of arrivals, servers, and waiting line
structure
• Calling population
• source of customers; infinite or finite
5-248
Elements of
Waiting Line Analysis

138. Waiting Line Analysis (cont.)
• Arrival rate (λ)
• frequency at which customers arrive at a waiting line
according to a probability distribution, usually Poisson
Service time (µ)
•
• time required to serve a customer, usually described by
negative exponential distribution
Service rate must be shorter than arrival rate (λ <
Queue discipline
• order in which customers are served
Infinite queue
• can be of any length; length of a finite queue is limited
•
•
µ)
•
5-250
Elements of
Waiting Line Analysis

139. Waiting Line Analysis (cont.)
• Channels
• number of
parallel
servers for
servicing
customers
• Phases
• number of
servers in
sequence a
customer
must go
through
5-251
Elements of
Waiting Line Analysis

140. Service Design
Chapter 5

141. Lecture outline





Service economy
Characteristics of services
Service design process
Tools for service design
Waiting line analysis
improvement
for service
5-2

142. Service Economy
Source: U.S. Bureau of Labor Statistics, IBM Almaden Research Center
5-3

143. Characteristics of Services
 Services
acts, deeds, or performances

 Goods
tangible objects

 Facilitating services
accompany almost all purchases of goods

 Facilitating goods
accompany almost all service purchases

5-5

144. Characteristics of Services (cont.)
 
Services are Service inseparable
intangible
Service output
from delivery
Services tend to be
dispersed
Services are
consumed more often
than products
 
is
variable decentralized and
 Services have higher

customer contact
Services are
perishable

 Services can be
emulated
easily
5-7

145. Service Design Process
5-8

146. Service Design Process (cont.)
 Service concept
purpose of a service; it defines target market
customer experience
Service package
and


mixture of physical items, sensual
psychological benefits
Service specifications
benefits, and


performance specifications
design specifications
delivery specifications



5-9

147. Tools for Service
Servicescapes
Design
  Service
blueprinting
space and function
ambient conditions
line of influence
line of interaction
line of visibility
line of support
 
 
signs, symbols,
artifacts
and
 

 Quantitative techniques  Front-office/Back-
office
activities
5-15

148. Elements of Waiting Line Analysis
 Operating characteristics
average values for characteristics that describe
performance of waiting line system
Queue


a single waiting line

 Waiting line system
consists of arrivals, servers, and waiting
structure
Calling population
line


source of customers; infinite or finite

5-18

149. Elements of
Waiting Line Analysis (cont.)
 Arrival rate (λ)
frequency at which customers arrive at a waiting line
according to a probability distribution, usually Poisson
Service time (μ)


time required to serve a customer, usually described by
negative exponential distribution
Service rate must be shorter than arrival rate (λ <
Queue discipline



μ)
order in which customers are served

 Infinite queue
can be of any length; length of a finite queue is limited

5-20

150. Elements of
Waiting Line Analysis (cont.)
 Channels
number of
parallel
servers for
servicing
customers
Phases


number of
servers in
sequence a
customer
must go
through

5-21

151. Operating Characteristics
 Operating characteristics are assumed to
approach a steady state
5-22

152. Traditional Cost Relationships
 as service improves, cost increases
5-23

153. Psychology of Waiting
 Disney
Waiting rooms

magazines and
newspapers
televisions
costumed characters
mobile vendors
accurate wait times




Bank of America
 
mirrors special passes
 
Supermarkets

magazines
“impulse purchases”


5-24

154. Psychology of Waiting (cont.)
 Preferential treatment
Grocery stores: express lanes for customers with
few purchases
Airlines/car rental agencies: special cards available
to frequent-users or for an additional fee


Phone retailers: route calls to more or less

experienced salespeople based on customer’s
sales history
 Critical service providers
services of police department, fire department,
waiting is unacceptable; cost is not important
etc.


5-25

155. Waiting Line Models
 Single-server model
simplest, most basic waiting line structure

 Frequent variations (all with Poisson arrival
rate)
exponential service times
general (unknown) distribution of service times
constant service times
exponential service times with finite queue
exponential service times with finite calling
population





5-26

156. Basic Single-Server Model
 
Assumptions Computations
Poisson arrival rate λ =
μ =
n =
mean arrival rate
 
exponential
times
service mean service
number of
rate
 

first-come, first- customers in line

served queue
discipline
infinite queue
infinite calling
population
length


5-27

157. Basic Single-Server Model (cont.)
 
probability that no customers
are in queuing system
average number of customers
in queuing system
P0 =
( )
λ
–
λ
1 L =
μ μ – λ
 
probability of n customers in average number of customers
queuing system in waiting line
Pn =
( )λ ∙ P
(0 =
)( )
λ λ λ2
n n
L =
λ q
μ (μ
–
λ)
1 –
μ μ
μ
5-28

158. Basic Single-Server Model (cont.)
 
average time customer
spends in queuing system
probability that server is busy
and a customer has to wait
(utilization factor)
1 L
λ
W = = λ
ρ =
μ – λ
μ
 probability that server is idle
and customer can be served
 average time customer
spends waiting in line
λ I = 1 – ρ
λ
W q =
μ (μ
–
λ)
= 1 –
P0
=
μ
5-29

159. Basic Single-Server Model Example
5-30

160. Basic Single-Server
(cont.)
Model Example
5-31

161. Service Improvement Analysis
 waiting time (8 min.) is too long
hire assistant for cashier?
increased service rate
hire another cashier?
reduced arrival rate


 Is improved service worth the cost?
5-32

162. Advanced Single-Server Models
 Constant service times
occur most often when automated equipment
machinery performs service
or

 Finite queue lengths
there is a physical limitation
occur when
waiting line
Finite calling
to length of

 population
number of “customers” that can arrive is limited

5-34

163. Basic Multiple-Server Model
 single waiting line and service facility with
several independent servers in parallel
same assumptions as single-server model
sμ > λ


s = number of servers
servers must be able to
they arrive

serve customers faster than

5-36

164. Basic Multiple-Server Model (cont.)
 probability that there are no
1
customers in system
P0
=
= s – 1
∑
n
+
= 0
1 1 sμ
λ λ
n s
n!( μ
) (
s! )(
μ )
sμ - λ
 probability of n customers in system
1 λ n
– s( μ)P0 ,
{
for n > s
s!sn
1
Pn
= λ n
( )P0 , for n ≤
n! μ
s
5-37
n

165. Basic Multiple-Server Model (cont.)
 probability that customer must wait
1
( λ
)
s sμ λ
Pw
=
P
Lq = L –
s! μ sμ – μ
0
λ
λμ (λ/μ)s 1 Lq
L = Wq = W – =
λ
μ λ
P0 +
(s – 1)!
μ
(sμ – λ)2
L λ
W = ρ =
sμ
λ
5-38

166. Basic Multiple-Server Model Example
5-39

167. Basic Multiple-Server
(cont.)
Model Example
5-40

168. Basic Multiple-Server
(cont.)
Model Example
5-41

169. Basic Multiple-Server
(cont.)
Model Example
5-42

170. Basic Multiple-Server
(cont.)
Model Example
5-43

171. Basic Multiple-Server
Example (cont.)
Model
 To cut wait time,
representative
add another service
now, s = 4

 Therefore:
5-44

173. P4_Ch.6: Processes and Technology
Content

174. Processes and Technology
Chapter 6

175. •Process Planning
•Process Analysis
•Process Innovation
•Technology Decisions
6-277
Lecture Outline

176. • Process
• a group of related tasks with specific inputs and outputs
Process design
• what tasks need to be done and how they are
•
coordinated among functions, people, and
organizations
Process strategy
• an organization's overall approach for physically
producing goods and services
Process planning
• converts designs into workable instructions for
manufacture or delivery
•
•
6-278
Process Planning

177. • Vertical integration
• extent to which firm will produce inputs and control outputs
each stage of production process
Capital intensity
of
•
• mix of capital (i.e., equipment, automation) and labor
resources used in production process
Process flexibility
• ease with which resources can be adjusted in response to
changes in demand, technology, products or services, and
resource availability
Customer involvement
• role of customer in production process
•
•
6-279
Process Strategy

178. PROJECT BATCH MASS CONT.
individual
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive
Advantage (New York:McGraw-Hill, 2001), p. 210
6-284
Type of
product
Unique
Made-to-
order
(customized)
Made-to-
stock
(standardized )
Commodity
Type of
customer
Product
demand
One-at-a-
time
Infrequent
Mass
market
Mass
market
Very stable
Few
customers
Fluctuates Stable
Types of Processes

179. Types of Processes (cont.)
PROJECT BATCH MASS CONT.
assembly
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive
Advantage (New York:McGraw-Hill, 2001), p. 210
6-285
Demand
volume
Very low Low to
medium
High Very high
No. of
different
products
Production
system
Infinite
variety
Long-term
project
Few Very few
Continuous,
process
industries
Many, varied
Discrete, job
shops
Repetitive,
lines
Types of Processes (

180. Types of Processes (cont.)
PROJECT BATCH MASS CONT.
automated
refining
range of
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive
Advantage (New York:McGraw-Hill, 2001), p. 210
6-286
Equipment Varied General-
purpose
Special-
purpose
Highly
Primary
type of
work
Worker
skills
Specialized
contracts
Experts,
crafts-
persons
Assembly
Mixing,
treating,
Equipment
monitors
Fabrication
Wide range
of skills
Limited
skills
Types of Processes (

181. Types of Processes (cont.)
PROJECT BATCH MASS CONT.
large capacity,
atest technolog
far-reaching errors,
televisions,
shipbuilding,
fast food
Source: Adapted from R. Chase, N. Aquilano, and R. Jacobs, Operations Management for Competitive Advantage (New
York:McGraw-Hill, 2001), p. 210
6-287
Advantages l
Custom work,
y
Flexibility,
quality
Efficiency,
speed,
low cost
Highly efficient,
ease of control
Dis-
advantages
Examples
Non-repetitive,
small customer
base, expensive
Construction,
spacecraft
Costly, slow,
difficult to
manage
Capital
investment;
lack of
responsiveness
Difficult to change,
limited variety
Paint, chemicals,
foodstuffs
Machine shops,
print shops,
bakeries,
education
Automobiles,
computers,
Types of Processes (

182. Process Selection with
•
•
examines cost trade-offs associated with
Cost
• Fixed costs
• constant regardless of the number of units
demand volume
produced
• Variable costs
• vary with the volume of units produced
Revenue
• price at which an item is sold
Total revenue
• is price times volume sold
Profit
• difference between total revenue and
•
•
•
total cost
6-288
Process Selection wit
Break-Even Analysis

183. Process Selection with
(cont.)
T
otal cost = fixed cost + total variable
TC = cf + vcv
cost
T
otal revenue = volume x price
TR = vp
Profit = total revenue - total cost
Z = TR – TC = vp - (cf + vcv)
6-289
Process Selection wit
Break-Even Analysis

184. Process Selection with
Break-Even Analysis (cont.)
vp = cf + vcv
cf
Solving for Break-Even Point (Volume)
6-290
TR = TC
vp - vcv = cf
v(p - cv) = cf
v = p - cv
Process Selection wi
Break-Even Analysi

185. Break-Even Analysis: Example
Fixed cost
Variable cost
Price
=
=
=
cf = $2,000
cv = $5 per raft
p = $10 per raft
v = = = 400 rafts
6-291
Break-even point is
cf 2000
p - cv 10 - 5
Break-Even Analysis

186. Break-Even Analysis: Graph
cost
line
6-292
Dollars
$3,000 — Total
$2,000 —
$1,000 —
T
otal
revenue
line
400 Units
Break-even point
Break-Even Analysis

187. Process A
$2,000 + $5v
Process B
$10,000 + $3v
=
$2v
v
=
=
$8,000
4,000 rafts
Below or equal to 4,000, choose A
B
Above or equal to 4,000, choose
6-294
Process Selection

188. •Building a flowchart
• Determine objectives
• Define process boundaries
• Define units of flow
• Choose type of chart
• Observe process and
• Map out process
• Validate chart
collect data
6-297
Process Analysis

189. •look at manufacture of product or delivery
of service from broad perspective
•Incorporate
• nonproductive activities (inspection,
transportation, delay, storage)
• productive activities (operations)
6-298
Process Flowcharts

190. Operations
Inspection
6-299
Transportation
Delay
Storage
Process Flowchart
Symbols

191. Process
Flowchart
of Apple
Processin
g
6-300

192. Simple Value Chain Flowchart
6-302
Simple Value Chain

193. of a process for
6-303
Continuous improvement
refines the breakthrough
Breakthrough
Improvement
Continuous improvement activities
peak; time to reengineer process
T
otal redesign
breakthrough
improvements
Process Innovation

194. Principles for Redesigning
• Remove waste, simplify, and consolidate
similar activities
• Link processes to create value
• Let the swiftest and most capable enterprise
execute the process
• Flex process for any time, any place, any way
• Capture information digitally at the source and
propagate it through process
6-307
Principles for Redesi
Processes

195. Principles for Redesigning
• Provide visibility through fresher and richer
information about process status
• Fit process with sensors and feedback loops
that can prompt action
• Add analytic capabilities to process
• Connect, collect, and create knowledge around
process through all who touch it
• Personalize process with preferences and
habits of participants
6-308
Principles for Redesi
Processes (cont.)

196. Techniques for Generating
• Vary the entry point to a problem
• in trying to untangle fishing lines, it's best
from the fish, not the poles
to start
• Draw analogies
• a previous solution to an old problem might work
• Change your perspective
• think like a customer
• bring in persons who have no knowledge of
process
6-309
Techniques for Generat
Innovative Ideas

197. Techniques for Generating
• Try inverse brainstorming
• what would increase cost
• what would displease the customer
• Chain forward as far as possible
• if I solve this problem, what is the next
• Use attribute brainstorming
• how would this process operate if. . .
• our workers were mobile and flexible
• there were no monetary constraints
• we had perfect knowledge
problem
6-310
Techniques for Generat
Innovative Ideas (cont.)

198. • Computer-aided
design (CAD)
• Group technology
(GT)
• Computer-aided
engineering (CAE)
• Collaborative
product commerce
(CPC)
A Technology Primer
Product Technology
electronically
electronically
exchange of information among designers
6-313
• Computer-aided
design (CAD)
• Group technology
• Creates and communicates designs
• Classifies designs into families for easy
(GT)
• Computer-aided
engineering (CAE)
• Collaborative
product commerce
(CPC)
retrieval and modification
• T
ests functionality of CAD designs
• Facilitates electronic communication and
and suppliers
A Technology Prime

199. • Product data
management
(PDM)
• Product life cycle
management
(PLM)
• Product
configuration
A Technology Primer (cont.)
Product Technology
for the life of the product
customer service, recycling, and disposal
(PLM)
who have selected among various options,
6-314
• Product data
management
(PDM)
• Keeps track of design specs and revisions
• Integrates decisions of those involved in
• Product life cycle
management
• Product
configuration
product development, manufacturing, sales,
• Defines products “configured” by customers
usually from a Web site
A Technology Prime

200. • Standard for
exchange of
product model data
(STEP)
• Computer-aided
design and
manufacture
(CAD/CAM)
• Computer aided
process (CAPP)
• E-procurement
A Technology Primer (cont.)
Process Technology
different CAD vendors; translates CAD data
(CAD) and automated manufacture (CAM)
manufacture
database of similar requirements
marketplaces, auctions, or company
6-315
• Standard for
exchange of
product model data
• Set standards for communication among
into requirements for automated inspection
(STEP)
• Computer-aided
design and
(CAD/CAM)
• Computer aided
process (CAPP)
• E-procurement
and manufacture
• Electronic link between automated design
• Generates process plans based on
• Electronic purchasing of items from e-
websites
A Technology Prime

201. • Computer
numerically control
(CNC)
• Flexible
manufacturing
system (FMS)
• Robots
• Conveyors
A Technology Primer (cont.)
Manufacturing Technology
variety of operations with the help of automated
automated material handling system to produce a
less flexible
belt or overhead chain; “reads” packages and
6-316
• Computer
numerically control
(CNC)
• Machines controlled by software code to perform a
tool changers; also collects processing information
and quality data
• Flexible
manufacturing
system (FMS)
• Robots
• Conveyors
• A collection of CNC machines connected by an
wide variety of parts
• Manipulators that can be programmed to perform
repetitive tasks; more consistent than workers but
• Fixed-path material handling; moves items along a
diverts them to different directions; can be very fast
A Technology Prime

202. • Automatic guided
vehicle (AGV)
• Automated storage
and retrieval system
(ASRS)
• Process Control
• Computer-integrated
manufacturing (CIM)
A Technology Primer (cont.)
Manufacturing Technology
specified path; directed by wire or tape embedded
• Automated storage
maintenance, and quality
manufacturing
6-317
• Automatic guided
vehicle (AGV)
• A driverless truck that moves material along a
in floor or by radio frequencies; very flexible
• An automated warehouse—some 26 stores high—
and retrieval system
(ASRS)
• Process Control
• Computer-integrated
manufacturing (CIM)
in which items are placed in a carousel-type
storage system and retrieved by fast-moving
stacker cranes; controlled by computer
• Continuous monitoring of automated equipment;
makes real-time decisions on ongoing operation,
• Automated manufacturing systems integrated
through computer technology; also called e-
A Technology Prime

203. • Business – to –
Business (B2B)
• Business – to –
Consumer (B2C)
• Internet
• Intranet
• Extranet
A Technology Primer (cont.)
Information Technology
Consumer (B2C)
organization; can be password (i.e., firewall)
access with select suppliers, customers, and
6-318
• Business – to –
Business (B2B)
• Business – to –
• Electronic transactions between businesses
usually over the Internet
• Electronic transactions between businesses and
their customers usually over the Internet
• Internet
• Intranet
• Extranet
• A global information system of computer networks
that facilitates communication and data transfer
• Communication networks internal to an
protected sites on the Internet
• Intranets connected to the Internet for shared
trading partners
A Technology Prime

204. • Bar Codes
• Radio Frequency
Identification tags
(RFID)
• Electronic data
interchange (EDI)
• Extensive markup
language (XML)
• Enterprise
resource planning
(ERP)
A Technology Primer (cont.)
Information Technology
identifies item and other information when read by a
• An integrated circuit embedded in a tag that can send
(RFID)
and inflexible
data before its is sent
human resources
resource planning
6-319
• Bar Codes
• Radio Frequency
Identification tags
• A series of vertical lines printed on most packages that
scanner
and receive information; a twenty-first century bar code
• Electronic data
interchange (EDI)
• Extensive markup
language (XML)
• Enterprise
(ERP)
with read/write capabilities
• A computer-to-computer exchange of business
documents over a proprietary network; very expensive
• A programming language that enables computer – to -
computer communication over the Internet by tagging
• Software for managing basic requirements of an
enterprise, including sales & marketing, finance and
accounting, production & materials management, and
A Technology Prime

205. • Supply chain
management (SCM)
• Customer relationship
management (CRM)
• Decision support
systems (DSS)
• Expert systems (ES)
• Artificial intelligence
(AI)
A Technology Primer (cont.)
Information Technology
distributors
compiling and analyzing customer data
and an interactive component for what-if analysis
• A field of study that attempts to replicate elements of
systems, genetic algorithms, neural networks, and fuzzy
6-320
• Supply chain
management (SCM)
• Customer relationship
• Software for managing flow of goods and information
among a network of suppliers, manufacturers and
• Software for managing interactions with customers and
management (CRM)
• Decision support
systems (DSS)
• Expert systems (ES)
• Artificial intelligence
(AI)
• An information system that helps managers make
decisions; includes a quantitative modeling component
• A computer system that uses an expert knowledge base
to diagnose or solve a problem
human thought in computer processes; includes expert
logic
A Technology Prime

207. P5_Ch.7: Capacity and Facilities
Content

208. O
Op
pe
e a
a o
on
ns
s M
Ma
an
na
ag
ge
em
me
en
n
Capacity and Facilities
Chapter 7

209. • Capacity Planning
• Basic Layouts
• Designing Process Layouts
• Designing Service Layouts
• Designing Product Layouts
• Hybrid Layouts
Lecture Outline

210. • Maximum capability to produce
• Capacity planning
• establishes overall level of productive
resources for a firm
• 3 basic strategies for timing of capacity
expansion in relation to steady growth in
demand (lead, lag, and average)
Capacity

211. • Capacity increase depends on
• volume and certainty of anticipated demand
• strategic objectives
• costs of expansion and operation
• Best operating level
• % of capacity utilization that minimizes unit costs
• Capacity cushion
• % of capacity held in reserve for unexpected
occurrences
Capacity (cont.)

212. • it costs less per unit to produce high levels of
output
• fixed costs can be spread over a larger number of
units
• production or operating costs do not increase
linearly with output levels
• quantity discounts are available for material
purchases
• operating efficiency increases as workers gain
experience
Economies of Scale

213. Best Operating Level for a Hotel
Best Operating Level f

214. • Process layouts
• group similar activities together
according to process or function they
perform
• Product layouts
• arrange activities in line according to
sequence of operations for a particular
product or service
• Fixed-position layouts
• are used for projects in which product
cannot be moved
BASIC LAYOUTS

215. Process Layout in Services
Women’s
lingerie
Shoes Housewares
Women’s
dresses
Cosmetics
and jewelry
Children’s
department
Women’s
sportswear
Entry and
display area
Men’s
department
Process Layout in Se

216. Manufacturing Process Layout
Manufacturing Proce

217. In
Out
A Product Layout

218. Fixed-Position Layouts
• Typical of projects in
which product produced
is too fragile, bulky, or
heavy to move
• Equipment, workers,
materials, other
resources brought to the
site
Low equipment utilization
Highly skilled labor
Typically low fixed cost
Often high variable costs
•
•
•
•
7-335
Fixed-Position Layo

219. Designing Process Layouts
• Goal: minimize material handling costs
• Block Diagramming
• minimize nonadjacent loads
• use when quantitative data is
• Relationship Diagramming
• based on location preference
• use when quantitative data is
available
between areas
not available
Designing Process L

220. • Must be both attractive and functional
Types
• Free flow layouts
• encourage browsing, increase impulse purchasing, are flexible
•
and visually appealing
• Grid layouts
• encourage customer familiarity, are low cost, easy to clean and
secure, and good for repeat customers
• Loop and Spine layouts
• both increase customer sightlines and exposure to products,
while encouraging customer to circulate through the entire
store
Designing Service
Layouts

221. Types of Store Layouts

222. • Objective
• Balance the assembly line
Line balancing
• tries to equalize the amount of work at each
•
workstation
Precedence requirements
• physical restrictions on the order in which operations
are performed
Cycle time
• maximum amount of time a product is allowed to
spend at each workstation
•
•
Designing Product
Layouts

223. Cd = desired units of output
Cd = (120 units)
= = 4 minutes
Cd 120
production time available
(8 hours x 60 minutes / hour)
480
Cycle Time Example

224. Time
• Cycle time = max time spent at any station
• Flow time = time to complete all stations
4 minutes 4 minutes 4 minutes
Flow time = 4 + 4 + 4 = 12 minutes
Cycle time = max (4, 4, 4) = 4 minutes
3
2
1
Flow Time vs Cycle

225. Efficiency of Line and Balance Delay
Efficiency workstations
• Balance
∑ ∑
ti ti
nCa Cd
time of line
ti = completion time for element i
Efficiency of Line and Balance Dela
Minimum number of
i i
∑ ti ∑ ti
delay
• total idle
time of lin
• calculated
as (1 -
efficiency)
E = i = 1
N = i = 1
where
j = number of work elements
n = actual number of workstations
Ca = actual cycle time
Cd = desired cycle time

226. dure
1.
2.
3.
Draw and label a precedence diagram
Calculate desired cycle time required for line
Calculate theoretical minimum number of
workstations
4. Group elements into workstations, recognizing
time and precedence constraints
Calculate efficiency of line
Determine if theoretical minimum number of
cycle
5.
6.
workstations or an acceptable efficiency level has
been reached. If not, go back to step 4.
Line Balancing Proce

227. B
0.4
Line Balancing: Example
WORK ELEMENT PRECEDENCE TIME (MIN)
A Press out sheet of fruit — 0.1
B Cut into strips A 0.2
C Outline fun shapes A 0.4
D Roll up and package B, C 0.3
0.2
0.1 A D 0.3
C

228. Cd = = = 0.4 minute
Line Balancing: Example (cont.)
WORK ELEMENT PRECEDENCE TIME (MIN)
A Press out sheet of fruit — 0.1
B Cut into strips A 0.2
C Outline fun shapes A 0.4
D Roll up and package B, C 0.3
40 hours x 60 minutes / hour 2400
6,000 units 6000
N =
0.1 + 0.2 + 0.3 + 0.4
=
1.0
= 2.5 � 3 workstations
0.4 0.4

229. N = 2.5
0.4
Line Balancing: Example (cont.)
REMAINING REMAINING
WORKSTATION ELEMENT TIME ELEMENTS
1 A 0.3 B, C
B 0.1 C, D
2 C 0.0 D
3 D 0.1 none
B
0.2
0.1 A D 0.3
C
Cd = 0.4

230. Line Balancing: Example (cont.)
Cd = 0.4
N = 2.5
1.2
3(0.4)
E =
0.1 + 0.2 + 0.3 + 0.4
=
1.0
= 0.833 = 83.3%
Work Work Work
station 1 station 2 station 3
A, B C D
0.3 0.4 0.3
minute minute minute
Line Balancing: Examp

231. • Cellular layouts
• group dissimilar machines into work centers (called cells)
that process families of parts with similar shapes or
processing requirements
• Production flow analysis (PFA)
• reorders part routing matrices to identify families of parts
with similar processing requirements
Flexible manufacturing system
• automated machining and material handling systems
which can produce an enormous variety of items
Mixed-model assembly line
• processes more than one product model in one line
•
•
Hybrid Layouts

232. Original Process Layout
Assembly
4 6 7 9
5 8
2
1 3
10 12
11
A B C Raw materials
Original Process Layou

233. Revised Cellular Layout
11
Assembly
8 10 9 12
4 Cell 1 Cell 2 6 Cell 3
7
2 1 3 5
A B C
Raw materials
Revised Cellular Layou

234. F x x x
Reordered Routing Matrix
Parts
Machines
1 2 4 8 10 3 6 9 5 7 11 12
A
D
x x x x x
x x x x x
C
G
B
x x x
x x x x
x x x x
x x x
x x x
H
E

235. Advantages and Disadvantages
• Advantages
• Reduced material
handling and transit
• Reduced setup time
• Disadvantages
Inadequate part families
Poorly balanced cells
•
time •
Expanded training and
scheduling of workers
Increased capital
investment
•
• Reduced work-in-
process inventory
• Better use of human
resources
• Easier to control
• Easier to automate
•
Advantages and Disadv
of Cellular Layouts

236. • FMS consists of numerous programmable
machine tools connected by an automated
material handling system and controlled
a common computer network
by
•
•
FMS combines flexibility with efficiency
FMS layouts differ based on
• variety of parts that the system can process
• size of parts processed
• average processing time required for part
completion
Flexible Manufacturing
Systems (FMS)

237. • Produce multiple models in any order
on one assembly line
• Issues in mixed model lines
• Line balancing
• U-shaped lines
• Flexible workforce
• Model sequencing
Mixed Model
Assembly Lines

238. O
Op
pe
e a
a o
on
ns
s M
Ma
an
na
ag
ge
em
me
en
n
Facility Location Models
Chapter 7 Supplement

239. • Types of Facilities
• Site Selection: Where to Locate
•Location Analysis Techniques
Supplement 7-374
Lecture Outline

241. P6_Ch.8: Human Resources
Content

242. Human Resources
Chapter 8

243. •
•
Human Resources and Quality Management
Changing Nature of Human Resources
Management
• Contemporary Trends in Human Resources
Management
Employee Compensation
Managing Diversity in Workplace
Job Design
Job Analysis
Learning Curves
•
•
•
•
•
8-403
Lecture Outline

244. Human Resources and Quality
• Employees play important
role in quality management
Malcolm Baldrige National
Quality Award winners have
• Employees have power to
make decisions that will
improve quality and customer
service
•
a
pervasive human resource
focus
Employee training and
• Strategic goals for quality and
customer satisfaction require
teamwork and
participation
group
•
education are recognized
necessary long-term
investments
as
8-404
Human Resources and
Management

245. Changing Nature of Human
Resources Management
• Scientific management
• Breaking down jobs into
elemental activities and
simplifying job design
• Assembly-line
• Production meshed with
management
principles of scientific
• Jobs
• Comprise a set of tasks,
elements, and job motions
(basic physical
movements)
In a piece-rate wage
system, pay is based on
output
• Advantages of task
specialization
• High output, low costs,
and minimal training
Disadvantages of task
specialization
• Boredom, lack of
motivation, and physical
and mental fatigue
•
•
8-405
Changing Nature of
Resources Managem

246. Employee Motivation
•Motivation •Improving Motivation
(cont.)
•design of jobs to fit employee
•work responsibility
•empowerment
•willingness to work hard because
that effort satisfies an employee
need
•Improving Motivation
•positive reinforcement and
feedback
•restructuring of jobs when
necessary
•rewards based on company as
well as individual performance
•achievement of company goals
•effective organization
discipline
and
•fair treatment of people
•satisfaction of employee needs
•setting of work-related goals
8-406
Employee Motivatio

247. f
Self-
actualization
Esteem
Social
Safety/Security
Physiological (financial)
• Advancement
8-407
Douglas McGregor’s
Theory X and Theory Y
Frederick Herzberg’s
Hygiene/Motivation
Theories
•Theory X Employee
• Dislikes work
•Hygiene Factors
• Company policies
• Must be coerced
• Shirks responsibility
• Little ambition
• Security top motivator
•Theory Y Employee
• Work is natural
• Self-directed
• Controlled
• Accepts responsibility
• Makes good decisions
• Supervision
• Working conditions
• Interpersonal relations
• Salary, status, security
•Motivation Factors
• Achievement
• Recognition
• Job interest
• Responsibility
• Growth
Abraham Maslow’s
Pyramid of Human
Needs
Evolution of Theories o
Employee Motivation

248. Contemporary Trends in
Human Resources Management
• Job training
• extensive and varied
• two of Deming’s 14 points
refer to employee
education and training
• Empowerment
giving employees
authority to make
decisions
•
• Cross Training • Teams
• an employee
than one job
Job rotation
learns more group of employees work
on problems in their
immediate work area
•
•
• horizontal movement
between two or more jobs
according to a plan
8-408
Contemporary Trend
Human Resources M

249. Contemporary Trends in Human
Resources Management (cont.)
• Job enrichment
• vertical enlargement
• allows employees control
over their work
• Alternative workplace
• nontraditional work location
Telecommuting
•
employees work
electronically from a
location they choose
Temporary and part-time
employees
• horizontal enlargement
• an employee is assigned a
complete unit of work with
defined start and end
Flexible time
• part of a daily work
schedule in which
employees can choose
time of arrival and
departure
•
•
•
mostly in fast-food and
restaurant chains, retail
companies, package delivery
services, and financial firms
•
8-409
Contemporary Trends i
Resources Managemen

250. Employee Compensation
• Types of pay
• hourly wage
• the longer someone works, the more s/he is paid
• individual incentive or piece rate
• employees are paid for the number of units
during the workday
• straight salary
• common form of payment for management
• commissions
• usually applied to sales and salespeople
they produce
8-410
Employee Compe

251. Employee Compensation (cont.)
•Gainsharing
• an incentive plan joins employees
in a common effort to achieve
company goals in which they
share in the gains
•Profit sharing
• sets aside a portion of profits
employees at year’s end
for
8-411
Employee Compensati

252. Managing Diversity in
• Workforce has become more diverse
• 4 out of every 10 people entering workforce during
the decade from 1998 to 2008 will be members of
minority groups
• In 2000 U.S. Census showed
primarily Hispanic and Asian,
majorities
• Companies must develop a
to managing diversity
that some minorities,
are becoming
strategic approach
8-412
Managing Diversity i
Workplace

253. • Affirmative action • Managing diversity
an outgrowth of laws and
regulations
government initiated and
mandated
process of creating a work
environment in which all
employees can contribute
to their full potential in
• •
•
order to achieve a
company’s goals
voluntary in nature, not
mandated
seeks to improve internal
communications and
interpersonal
relationships, resolve
conflict, and increase
product quality,
productivity, and efficiency
8-413
contains goals and
timetables designed to
increase level of
participation by women
and minorities to attain
parity levels in a
company’s workforce
not directly concerned
with increasing company
success or increasing
profits
•
•
•
•
Affirmative Actions vs.
Managing Diversity

254. Diversity Management Programs
• Education
• Awareness
• Communication
• Fairness
• Commitment
8-414
Diversity Management

255. Global Diversity Issues
• Cultural, language, geography
• significant barriers to managing a globally diverse workforce
E-mails, faxes, Internet, phones, air travel
• make managing a global workforce possible but not
•
necessarily effective
How to deal with diversity?
• identify critical cultural elements
• learn informal rules of communication
• use a third party who is better able to bridge cultural gap
• become culturally aware and learn foreign language
• teach employees cultural norm of organization
•
8-415
Global Diversity Issu

256. Attributes of Good Job Design
• An appropriate degree
repetitiveness
An appropriate degree
attention and mental
of • Goals and achievement
feedback
A perceived contribution
• of •
to a useful product or
absorption
Some employee
responsibility for
decisions and discretion
Employee control over
their own job
service
Opportunities for
and friendships
Some influence over the
in groups
Use of skills
• •
personal relationships
• •
way work is carried out
•
8-416
Attributes of Good J

257. Factors in Job Design
• Task analysis
• how tasks fit together to form a job
Worker analysis
• determining worker capabilities and responsibilities
•
for a
job
Environment analysis
• physical characteristics and location of a job
Ergonomics
• fitting task to person in a work environment
Technology and automation
• broadened scope of job design
•
•
•
8-417
Factors in Job Desig

258. Elements of Job Design
8-418
Elements of Job Desi

259. •Method Analysis (work methods)
• Study methods used in the work included in
the job to see how it should be done
• Primary tools are a variety of charts that
illustrate in different
process is done
ways how a job or work
8-419
Job Analysis

260. 8-420
Process Flowchart Symbols
Operation:
An activity directly contributing to product or service
Transportation:
Moving the product or service from one location to another
Inspection:
Examining the product or service for completeness,
irregularities, or quality
Delay:
Process having to wait
Storage:
Store of the product or service

261. 8-421
Process Flowchart

262. Worker- Accept card
Machine
Chart
Begin photo process
–
Photo/card processed
Idle
8-422
– 9
Date 10/14
Photo Machine
–
–
1
2
3
Key in customer data
on card
Feed data card in
Position customer for phot
2.6
0.4
1.0
Idle
– o Idle
4
5
6
7
8
Take picture
Idle
Inspect card & trim edges
0.6
3.4
1.2
–
–
–
–
Job Photo-Id Cards
Time Time
(min) Operator (min)

263. Worker-Machine Chart: Summary
8-423
Summary
Work
Idle
Operator Time % Photo Machine Time %
5.8 63
3.4 37
4.8 52
4.4 48
Total 9.2 min 100% 9.2 Min 100%
Worker-Machine Chart

264. • Used to ensure efficiency of motion in
a job
• Frank & Lillian Gilbreth
• Find one "best way" to do task
• Use videotape to study motions
8-424
Motion Study

265. General Guidelines for
• Efficient Use Of Human Body
• Work
•simplified, rhythmic and symmetric
• Hand/arm motions
•coordinated and simultaneous
Employ full extent of physical capabilities
Conserve energy
•use machines, minimize distances, use momentum
T
asks
•simple, minimal eye contact and muscular effort, no
unnecessary motions, delays or idleness
•
•
•
8-425
General Guidelines f
Motion Study

266. General Guidelines for
• Efficient Arrangement of Workplace
• T
ools, material, equipment - designated, easily accessible
location
Comfortable and healthy seating and work area
•
• Efficient Use of Equipment
•
•
•
Equipment and mechanized tools enhance worker abilities
Use foot-operated equipment to relieve hand/arm stress
Construct and arrange equipment to fit worker use
8-426
General Guidelines f
Motion Study

267. • Illustrates
improvement rate of
workers as a job is
repeated
• Processing time per
unit decreases by a
constant percentage
each time output
doubles
8-427
Processing
time
per
unit
Units produced
Learning Curves

268. Learning Curves (cont.)
8-428
Time required for the nth unit =
tn = t1nb
where:
tn = time required for nth unit produced
t1 = time required for first unit produced
n = cumulative number of units produced
b = ln r where r is the learning curve percentage
ln 2 (decimal coefficient)
Learning Curves (co

269. 8-429
Contract to produce 36 computers. t1
= 18 hours, learning rate = 80% What
is time for 9th, 18th, 36th units?
t9 = (18)(9)ln(0.8)/ln 2 = (18)(9)-0.322
= (18)/(9)0.322 = (18)(0.493) = 8.874hrs
t18 = (18)(18)ln(0.8)/ln 2 = (18)(0.394) = 7.092hrs
t36 = (18)(36)ln(0.8)/ln 2 = (18)(0.315) = 5.674hrs
Learning Curve Effect

270. 8-430
Processing
time
per
unit
Learning Curve for Mass
Production Job
End of improvement
Standard
time
Units produced

271. Learning Curves (cont.)
• Advantages
• planning labor
• planning budget
• Limitations
product modifications
negate learning curve
effect
•
• determining
scheduling
requirements
improvement can derive
from sources besides
learning
industry-derived learning
curve rates may be
inappropriate
•
•
8-431
Learning Curves (cont.

272. O
Op
pe
e a
a o
on
ns
s M
Ma
an
na
ag
ge
em
me
en
n
Work Measurement
Chapter 8 Supplement

273. • Time Studies
• Work Sampling
Supplement 8-433
Lecture Outline

275. P7_Ch.9: Project Management
Content

276. O
Op
pe
e a
a o
on
ns
s M
Ma
an
na
ag
ge
em
me
en
n
Project Management
Chapter 9

277. •Project Planning
•Project Scheduling
•Project Control
•CPM/PERT
•Probabilistic Activity Times
•Microsoft Project
• Project Crashing and Time-Cost
Trade-off
9-451
Lecture Outline

278. Project Management Process
9-453
Project Management Pr
(cont.)

279. • Objective
• Scope
• Contract requirements
• Schedules
• Resources
• Personnel
• Control
• Risk and problem analysis
9-455
Project Elements

280. Project Team and Project Manager
• Project team
• made up of individuals from various areas and
departments within a company
• Matrix organization
• a team structure with members from functional
areas, depending on skills required
• Project manager
• most important member of project team
9-456
Project Team and Proje

281. Scope Statement and Work
•Scope statement
• a document that provides an understanding,
justification, and expected result of a project
•Statement of work
• written description of objectives of a project
•Work breakdown structure (WBS)
• breaks down a project into components,
subcomponents, activities, and tasks
9-457
Scope Statement and
Breakdown Structure

282. •Steps
• Define activities
• Sequence
• Techniques
Gantt chart
CPM/PERT
•
•
activities
• Estimate
Microsoft Project
•
time
• Develop schedule
9-461
Project Scheduling

283. • Graph or bar chart with a bar for each
project activity that shows passage of
time
• Provides visual display of project
schedule
• Slack
• amount of time an activity can be delayed
without delaying the project
9-462
Gantt Chart

284. • Time management
• Cost management
• Quality management
• Performance management
• Earned Value Analysis
• a standard procedure for numerically measuring a
project’s progress, forecasting its completion date and
cost and measuring schedule and budget variation
• Communication
• Enterprise project management
9-464
Project Control

285. • Critical Path Method (CPM)
• DuPont & Remington-Rand (1956)
• Deterministic task times
• Activity-on-node network construction
• Project Evaluation and Review Technique
(PERT)
• US Navy, Booz, Allen & Hamilton
• Multiple task time estimates; probabilistic
• Activity-on-arrow network construction
9-465
CPM/PERT

286. • Activity-on-node (AON)
• nodes represent activities,
and arrows show
precedence relationships
Activity-on-arrow (AOA)
•
• arrows represent activities
and nodes are events for
points in time
Event
• completion or beginning
of an activity in a project
Dummy
• two or more activities
cannot share same start
and end nodes
•
•
9-466
Node
1 2 3
Branch
Project Network

287. AOA Project Network for
Lay Dummy
house work
3 1
Design house Order and
financing materials paint carpet
9-467
3
foundation
2 0 Build Finish
1 2 4 3
6 1
7
and obtain receive Select 1 1 Select
5
AOA Project Network
a House

288. Concurrent Activities
Lay
Dummy
2 0
2 3
2 4
Order material
9-468
Lay foundation 3
foundation
1
Order material
(a) Incorrect precedence (b) Correct precedence
relationship relationship
Concurrent Activiti

289. AON Network for House
Finish work
3
2
1 1
and obtain
5 1
Select carpet
1
1
Select paint
materials
9-469
Start
Lay foundations Build house
2 4
7
3
Design house
3 6
financing
Order and receive
AON Network for H
Building Project

290. 4
2
1 1
5 1
1
3 + 2 + 3 + 1 = 9 months
through a network
3 + 2 + 1 + 1 + 1 = 8 months
3 + 1 + 3 + 1 = 8 months
completion time
3 + 1 + 1 + 1 + 1 = 7 months
9-470
Start
Critical Path
2 3
7
3
3 6
1
A: 1-2-4-7 • Critical path
B: 1-2-5-6-7 • Longest path
C: 1-3-4-7 • Minimum project
D: 1-3-5-6-7

291. Finish at 9 months
3
2
1 1
5 1
1
Start at 3 months
9-471
Start
Start at 5 months
2 4
7 Finish
3
3 6
1 Start at 6 months
Activity Start Times

292. • Earliest start time (ES)
• earliest time an activity can start
• ES = maximum EF of immediate predecessors
Forward pass
•
• starts at beginning of CPM/PERT network
determine earliest activity times
Earliest finish time (EF)
• earliest time an activity can finish
• earliest start time plus activity time
• EF= ES + t
to
•
9-473
Activity Scheduling

293. Activity Scheduling (cont.)
• Latest start time (LS)
• Latest time an activity can start without delaying
critical path time
• LS= LF - t
• Latest finish time (LF)
• latest time an activity can be completed without
delaying critical path time
• LF = minimum LS of immediate predecessors
Backward pass
• Determines latest activity times by starting at the
of CPM/PERT network and working forward
•
end
9-475
Activity Scheduling (

294. timates
• Beta distribution
• a probability distribution traditionally used in
CPM/PERT
Mean (expected time): t =
b - a
6
9-478
a + 4m + b
6
2
Variance: 2 =
where
a = optimistic estimate
m = most likely time estimate
b = pessimistic time estimate
Probabilistic Time Es

295. Equipment testing
installation
1 4
debugging
training
development
Manual 1,4,7
2 3,7,11
Start
System
changeover
3 6 System
9-480
Project Network with Probabilistic
Time Estimates: Example
Equipment
and modification
6,8,10 2,4,12 System Final
System
8 10
testing
3,6,9
5 11
Finish
Position 2,3,4 9 1,10,13
recruiting
Job Training 2,4,6
1,3,5 3,4,5 testing
Orientation
7
2,2,2

296. Activity Time Estimates
2 3 6 9 6 1.00
11 1 10 13 9 4.00
9-481
TIME ESTIMATES (WKS) MEAN TIME VARIANCE
ACTIVITY a m b t б2
1 6 8 10 8 0.44
3 1 3 5 3 0.44
4 2 4 12 5 2.78
5 2 3 4 3 0.11
6 3 4 5 4 0.11
7 2 2 2 2 0.00
8 3 7 11 7 1.78
9 2 4 6 4 0.44
10 1 4 7 4 1.00
Activity Time Estim

297. 11 9 4.00 16 25 16 25 0
9-482
Activity Early, Late Times,
and Slack
ACTIVITY t б ES EF LS LF S
1 8 0.44 0 8 1 9 1
2 6 1.00 0 6 0 6 0
3 3 0.44 0 3 2 5 2
4 5 2.78 8 13 16 21 8
5 3 0.11 6 9 6 9 0
6 4 0.11 3 7 5 9 2
7 2 0.00 3 5 14 16 11
8 7 1.78 9 16 9 16 0
9 4 0.44 9 13 12 16 3
10 4 1.00 13 17 21 25 8

298. 6
9-483
4 12 16
9 16 25
Earliest, Latest, and Slack
1 0 8 4 8 13
8 1 9 5 16 21
Critical Path
10 13 17
8 9 16
1 0 3
Start 2 0 6 Finish
7 9 16
0 6
5 6 9 11 16 25
3 0 3
3 2 5
3 6 9 9 9 13
6 3 7
4 5 9
7 3 5
2 14 16

299. 2 б2
2 + б5
2 б8
2 б11
2
= + +
9-484
Total project variance
= 1.00 + 0.11 + 1.78 + 4.00
= 6.89 weeks

300. Z =
9-486
Probabilistic Network Analysis
Determine probability that project is
completed within specified time
x -
where
= tp = project mean time
= project standard deviation
x = proposed project time
Z = number of standard deviations x
is from mean

301. • Crashing
• reducing project time by expending additional
resources
• Crash time
• an amount of time an activity is reduced
• Crash cost
• cost of reducing activity time
• Goal
• reduce project duration at minimum cost
9-500
Project Crashing

302. Project Network for Building
12
8
1 4
5 4
4
9-501
2 4
7
12
3 6
4
Project Network for
a House

303. Crash cost
Slope = crash cost per week
$3,000 –
–
9-502
Normal Time and Cost
vs. Crash Time and Cost
$7,000 –
$6,000 –
$5,000 – Crashed activity
$4,000 –
Normal activity
Normal cost
$2,000 –
$1,000 – Crash time Normal time
| | | | | | |
0 2 4 6 8 10 12 14 Weeks